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Insurance companies support rules for auto repair parts
By Insure.com staff

Insurance trade groups are getting behind federal legislation they say would preserve competition for cosmetic auto repair parts and keep car insurance rates down.

The Promoting Automotive Repair, Trade and Sales Act would limit the design patent on an auto repair part to 2.5 years from the current 14 years. Although it would bar sales of a competitive product during that period, it would allow other companies to design, manufacture and advertise their own versions while the patent was in effect.

Two California members of the House of Representatives -- Republican Darrell Issa and Democrat Zoe Lofgren -- introduced the bill.

Both the National Association of Mutual Insurance Companies (NAMIC) and the Property Casualty Insurers Association of America (PCI) voiced support.

"Without this legislation, more and more patents will be filed and competition for aftermarket parts will dwindle, removing options for consumers and increasing their costs," Jimi Grande, NAMIC's senior vice president of federal and political affairs, said in a press release.

Cosmetic aftermarket repair parts can cost as much as 50 percent less than those made by the original manufacturer, according to NAMIC.

Insurance companies are concerned about car companies creating a monopoly in auto repair parts. According to PCI, major car companies already control more than 72 percent of the collision parts market and are now obtaining design patents in record numbers, threatening the market for quality alternative collision parts. Since 2005, major car companies have more than doubled their existing design patents, PCI says.


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